AUTOSHOW-Toyota cautious on Europe sales, hopes on hybrids

By Chang-Ran Kim, Asia autos correspondent

GENEVA, March 1 (Reuters) - Toyota Motor Corp (7203.T) executives said on Monday it was too early to tell what impact the recent massive recalls would have on its sales in Europe, pinning their hopes on new hybrid models to slow the decline.

Toyota, the world's biggest automaker, had said in late January it expected its European sales to fall 5 percent to 840,000 vehicles this year. [ID:nTOE60P0AA]

That was just before the embattled automaker expanded a U.S. recall involving unintended acceleration to Europe, recalling 1.7 million more cars. That was followed by a recall of some 53,000 Prius hybrid cars for problems with braking.

"At this moment it's still difficult to forecast our sales," Toyota Motor Europe Chief Executive Tadashi Arashima told a small group of reporters on the eve of the Geneva auto show, while repeating Toyota's projection of a sales decline in Europe.

In February, Toyota's sales significantly underperformed the market as delivery was halted for the recalled models for up to a week at the beginning of the month. [ID:nLDE61N2BW]

"The key is whether customers will return to showrooms in March," Toyota Motor Europe Vice President Didier Leroy said in a roundtable dominated by questions over the recall saga.

Toyota has recalled more than 8 million vehicles in recent months for problems related to acceleration and braking, most of them in its biggest market, the United States.

Leroy said Toyota was taking steps to restore customers' confidence by acting fast on repairs and complaints through expanded hours and staff at dealerships. So far, up to 15 percent of the cars with acceleration problems and about 30 percent of the new Priuses had been fixed, he said.

While acknowledging that attracting new customers could be more challenging, Leroy stressed that Toyota would not resort to discounting or other sales incentives to boost demand.

"I don't believe in incentives," he said. "Incentives are a sign that you have no faith in the quality of your cars."

In the United States, Toyota has said it would begin offering incentives in response to marketing schemes adopted by rivals such as General Motors Co [GM.UL] and Ford Motor Co (F.N) specifically targeting Toyota drivers.

Toyota's European executives said the automaker would press forward with its strategy of using hybrid cars to attract a growing number of fuel-conscious customers as Europe tightens its regulations on carbon dioxide emissions.

At the Geneva auto show opening to the media on Tuesday, Toyota will showcase the UK-built Auris hybrid -- the first gasoline-electric model to be made in Europe -- with CO2 emissions of 89 grams per kilometre, the lowest in its segment. The car will go on sale in Europe in July.

Toyota will also unveil the Lexus CT 200h, the first full hybrid vehicle in the premium compact segment. (Editing by Gary Hill)